News Corp CEO Robert Thomson has announced that there is “third party interest” in Foxtel, and that the company is evaluating options for the business with advisors in light of “external interest.”
The CEO did not indicate where the interest came from, but some U.S. media analysts believe it may be from private equity groups.
“We are confident in the company’s long-term prospects and are continuing to review our portfolio with a focus on maximising returns for shareholders,” he told shareholders in the company’s quarterly financial statement issued on Aug. 9.
“That review has coincided recently with third-party interest in a potential transaction involving the Foxtel Group, which has been positively transformed in recent years.”
However, he also told an investor briefing on Aug. 8 that News Corp. had “no imminent interest in selling Foxtel” and that the company had no plans for acquisitions either.
News Corp owns 65 percent of the company, with Telstra holding the rest.
New Services Launched
In addition to the pay TV Foxtel service, the group recently launched Hubbl, which operates local streaming services Kayo Sports, Binge, Flash, Lifestyle, as well as the WatchAFL and WatchNRL services in international markets.It aims to bring content from both free-to-air providers and paid subscription services into a single user interface, and is costing$13 million to launch.
Initially a satellite service, two thirds of Foxtel’s predominantly Australian customers now stream its content.
It has 4.6 million paid subscribers, while Binge and Kayo both reported 1.5 million each. Overall, the business achieved revenues of $455 million for the March quarter, a fiver percent drop year-on-year, though this was mostly due to foreign currency fluctuations.
Overall, though, News Corp posted fourth-quarter revenues that were up 6 percent on the previous year to $3.9 billion (US$2.58 billion), driven by higher revenues from the ASX-listed REA Group—an online real estate listing service—plus book sales, and continued growth of the Dow Jones service.
Any sale of Foxtel could have an impact on sporting rights sales in future because of its attractiveness for subscribers.
Late last year the network signed multi-year deals with the South African, English and Indian cricket boards, making all competitions and all Australian men’s and women’s Test, One Day International (ODI), and T20 tours played in South Africa, England (except The Ashes), and India, exclusively available for Australian cricket fans on Foxtel and Kayo Sports.
